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Hamptons.com
May 20, 2014

Mortgage Woes: Can I Lose My Deposit And The Property?

John A. Viterittiby John A. Viteritti
in Real Estate
Home Real Estate

In our last article, “Buyer Beware,” I made reference to a court ruling, Estrada v. Metropolitan Property Group, in which the Manhattan Supreme Court found that the purchaser/borrower who relied on the space measurements in the appraisal report did so at his peril. The appraisal, done for the lender, did not relieve the purchaser/ borrower of his obligation to perform his due diligence. According to the court: “Plaintiff could have easily measured the apartment for himself.” The decision was affirmed on appeal.

Well what about a mortgage or loan commitment issued by a bank? Is there a difference between that and a funding commitment? According to Alfred M. Fazio, Esq., of the law firm, Capuder, Fazio, and Giaccoia, there is, “You have worked with a prospective purchaser for the past several months and finally your hard work has paid off because the purchaser has signed a contract and put down the required ten percent deposit. The purchaser has allegedly been pre-approved by a lender. Unfortunately for you and the purchaser, the commitment is anything but what it claims to be because it is subject to several paragraphs of requirements and conditions.”

What if one or more of these conditions have not been met, such as the purchaser’s employment status has changed. Is the purchaser entitled to get his deposit back? Again, let’s hear what Mr. Fazio has to say, “Pursuant to the standard form of a coop or condo contract or one to two family contract, a commitment which is conditional upon any factor other than an appraisal is considered a firm commitment and the purchaser cannot cancel the contract. Once a commitment is issued by the bank or mortgage company, if the bank does not complete the transaction for any reason other than a below market appraisal, the purchaser can be held in default and lose her deposit. The standard form of contract of sale contains a mortgage or loan contingency, not a funding contingency.”

North Fork attorney, William H. Price, Jr. advises, “The differing interests of the Seller and Buyer and the pitfalls facing both make it a necessity to thoroughly review the contract and your circumstances with your attorney.”

Ed Reale, Senior Managing Director, Brown Harris Stevens, Southampton, and New York attorney says, “The heightened scrutiny given lenders under the new ‘Truth in Lending Ability to Repay’ mortgage standards have imposed a heavier burden on borrowers to prove their qualifications for a mortgage, sometimes right up to the time of closing.”

A question may arise, if the seller gets to keep the deposit, is the seller’s broker entitled to receive a percentage of the deposit equal to the percentage of the sale price? Case law says, only if the listing agreement between the seller and the broker states that.

Mr. Fazio further advises, “If you are acting as a buyer’s agent, with the requisite fiduciary obligations, you are held to a higher standard and your involvement in the loan or mortgage process will determine whether you will be named in a lawsuit should the purchaser attempt to recoup his deposit from the seller.”

A lesson to be learned is, do not presume, based on logic, or what you might think is fair, and just. Seek the assistance of qualified professionals. The price you pay will be well worth the benefit.

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LOCAL EVENTS

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16
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16
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Wine Dinner with Pradorey at R.AIRE

September 16 @ 06:30 PM - September 16 @ 09:30 PM
259 East Montauk Hwy, Hampton Bays, NY, 11946
17
Sep
17
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Bring a Friend; Make a Friend

September 17 @ 12:30 PM - September 17 @ 02:00 PM
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18
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Classic Albums Live Queen: News of the World

September 18 @ 08:00 PM - September 18 @ 10:00 PM
The Suffolk
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18
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Perry Bancs at The Stephen Talkhouse

September 18 @ 08:00 PM - September 18 @ 11:00 PM
161 Main St, Amagansett, NY 11930
19
Sep
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SoundWAVE – a bespoke sound bath hosted by WAVE WELLNESS Southampton

September 19 @ 05:45 PM - September 19 @ 06:45 PM
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Mark Your Calendar: Ten Hamptons Memorial Day Weekend Events

Mark Your Calendar: Ten Hamptons Memorial Day Weekend Events

  • The Hamptons have seen their fair share of collaborations and takeovers this summer. Still, nothing compares to The h.wood Group and Chase Sapphire Reserve’s transformation of Montauk hotspot Mary Lou’s into Delilah Montauk.⁠
⁠
The four-day takeover combined unforgettable dining experiences with show-stopping live entertainment featuring performances by Zack Bia, Alesso, Gwen Stefani, and DJ Pee.Wee (Anderson Paak). ⁠
⁠
Exclusively for Chase Sapphire Reserve cardholders, diners were treated to white glove hospitality and Delilah’s staples, including the famous chicken tenders and tuna tartare, and bold twists on Hamptons classics like lobster rolls, striped bass crudo, and crab and avocado toast. 

Check out more at Hamptons.com (Link in Bio)

#gwenstefani #alesso #djpeewee #chasesapphirereserve #delilahmontauk #montauk #hamptons
  • LVIS thrift shops are open Tuesdays through Saturdays 10 AM through 5 PM

donations are accepted Wednesday through Saturday 10 AM through 1 PM by appointment 

located at 95 Main St East Hampton
  • Check out the Top Hamptons Events This Weekend!⁠
⁠
🚗 The Bridge IX⁠
📅 Sat, Sept 13 | 2–7PM⁠
📍 The Bridge, Bridgehampton⁠
Over 300 rare automobiles showcased across stunning landscapes.⁠
⁠
🎬 23rd Annual Surf Movie Night⁠
📅 Fri, Sept 12 | 5:30–9PM⁠
📍 Southampton Arts Center⁠
Surfboard swap, live music & outdoor film screening. 🌊⁠
⁠
🍝 San Gennaro Feast of the Hamptons⁠
📅 Sat, Sept 13 – Sun, Sept 14 | 10AM⁠
📍 Hampton Bays⁠
Italian pastries, live entertainment & fireworks Sat @ 8:15PM 🎆⁠
⁠
🎭 In Process: Roderick George⁠
📅 Sat, Sept 13 | 7PM⁠
📍 Guild Hall, East Hampton⁠
A special in-process presentation of The Missing Fruit (Part I).⁠
⁠
🎤 Sheena Easton at WHBPAC⁠
📅 Sat, Sept 13 | 8PM⁠
📍 Westhampton Beach PAC⁠
Grammy-winning artist live on stage!⁠
⁠
☕ Cars & Coffee⁠
📅 Sun, Sept 14 | 9–11AM⁠
📍 Bridgehampton Museum⁠
Classic & exotic cars, food, drinks & live music.⁠
⁠
🛍 Hampton Vintage⁠
📅 Sun, Sept 14 | 10AM–5PM⁠
📍 Westhampton Beach Village Green⁠
Shop unique vintage finds!⁠
⁠
🎶 Hamptons Festival of Music Finale⁠
📅 Sun, Sept 14 | 4PM⁠
📍 St. Luke’s Church, East Hampton⁠
Featuring Cimarosa, Berlioz & Beethoven.⁠
⁠
🍷 Wine Dinner with Pradorey at R.AIRE⁠
📅 Tues, Sept 16 | 6:30PM⁠
📍 Hampton Bays⁠
Five-course tasting menu with exquisite wine pairings.⁠
⁠
🎥 Toy Story 30th Anniversary Screening⁠
📅 Sept 12–15 | Various Times⁠
📍 Southampton Playhouse⁠
Celebrate Woody & Buzz’s timeless adventure!⁠
⁠
Check out more events at Hamptons.com (Link in Bio)⁠
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#carshow #hamptons #sangennaro #sangennarofeast #winedinner #bridgeIX
  • The Animal Rescue Fund of the Hamptons (ARF Hamptons) hosted the Bow Wow Meow Ball in East Hampton. The evening’s honorees, Ellen and Chuck Scarborough, were presented with the Champion of Animals Award, recognizing their more than twenty-five years of support to ARF. ⁠
⁠
Over 400 guests celebrated ARF’s remarkable work with cocktails, followed by dinner catered by Olivier Cheng. Peter Marino, accompanied by his daughter and ARF Board Member Isabelle Trapnell Marino, presented the Scarboroughs with their award. ⁠
⁠
📸: Patrick McMullan/PMC⁠
⁠
Check out the full gallery at Hamptons.com (Link in Bio)⁠
.⁠
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#arf #bowwowmeowball #hamptons #animalrescuefund #animalrescue
  • Make sure to add this event to your list for next summer
#Seafood #localeats #mtk #montaukgreen
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    • Southampton, 39A to Montauk Hwy Merge
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